Top News

Motorists switching to electric cars are being handed a mixed bag of tax changes, with a key penalty scrapped for many buyers but a new annual charge now firmly in place.

The Driver and Vehicle Licensing Agency (DVLA) says electric cars priced at £50,000 or less are no longer subject to the so-called 'expensive car supplement' - provided they were first registered from April 1, 2025. The move removes a costly extra charge that previously hit higher-value vehicles, offering some relief to drivers looking to go electric.

However, the broader picture is less generous. From April 1, 2025, electric, zero and low-emission vehicles were brought into the vehicle tax system for the first time - ending years of zero-rated motoring for many.

Under the latest rates for 2026/27:

• New electric cars registered on or after April 1, 2025, pay £10 in the first year, rising to £200 annually thereafter
• Electric cars registered between April 2017 and March 2025 now pay £200 a year
• Older electric models registered between March 2001 and March 2017 pay £20 annually

At the same time, hybrid drivers have lost a long-standing perk, with the £10 annual discount for alternatively fuelled vehicles scrapped.

Previously, drivers of higher-value vehicles faced an additional charge on top of standard vehicle tax if their car cost more than £40,000.

Now, for electric vehicles registered from April 2025, that threshold has effectively been lifted to £50,000 - meaning many mid-range EVs escape the surcharge altogether. But those buying pricier models still face a sting.

Electric cars with a list price above £50,000 must pay both the standard rate and the additional supplement for five years, starting from the second year of tax.

The changes do not just affect cars.

• Most electric vans have moved to standard light goods vehicle tax rates
• Electric motorcycles are now taxed in line with the smallest engine size band

The overhaul marks a major shift in government policy, as electric vehicle owners are brought into line with petrol and diesel drivers.

While the removal of the expensive car supplement for sub-£50,000 EVs offers some respite, the introduction of annual charges means many drivers will now face bills where previously there were none.

For motorists weighing up the switch, the tax advantage of going electric has narrowed sharply - even as upfront incentives continue to fade.